Being a specialist is a good deal because of the rules! You answered all your own questions there dude. These guys make so much because they take it away from the public and the money they make gives them the clout to make even more. Since your signature quotes Newton I assume you are acquainted with the laws of physics and the concept of inertia. These guys make enough to buy protection from guys like Dick Grasso (there was no other reason for his insane compensation package). As far as risk goes, it's risky crossing the street, and we all take risk in the markets. They get compensated well for their risk (which is significantly reduced by 'the rules'). Finally, if I had the money to start a specialist firm, or Trumps dough for that matter i wouldn't be spending my time fucking around posting on these boards. Cheers MACD
So I ask again, if it is such a big advantage and the rules are so good, then what is stopping you from becoming a specialist? nitro
Quit pickin' on him Nitro.......we both know its a hardcore club down there....you can't just walk in with 100mm and say "I wanna be a Spec".......I wish it were that easy. You both have great points. I've made markets on NYSE, and took 25-40% of the daily volume on about 70-85 securities.....until the spec. slams the door and forgets all about "negative obligation". There are HUGE benefits to bein' a spec --& they know it & abuse it. At NAZ it's their job to make a buck off ya, but not so at NYSE....they we're supposed to be auctioneers once upon a time.
MRNBBO, AFAIK, all it takes is $2M to buy the seat, a few tests, and a background check. I imagine that if you work for one of the specialist firms, you may not even need that, but I am not sure. If the NYSE is too strict, you can try your hand MM at the Chicago Exchanges. The point is, the rules are as they are. You can either walk with your feet and not trade those markets, or you can trade them like everyone else. In the time I have been trading, all the complaining has gotten us traders where? LOL - it has never been this bad to trade the NYSE. So where does complaining get you? The other _real_ problem is, one never gets to hear the other side of the tale. If one of these specs ever came to ET and explained the risks they take once a year, which could potentially wipe them out, people here may appreciate the other side of the story. They live "Black Swan" every day. If Baron invited an honest to goodness spec from the NYSE to an ET chat, it would probably be the biggest attendance by a factor of 100 of any chat. BTW, are you saying that you were a spec at the NYSE? nitro
This echoes the reason that my trading has been predominately limited to the Naz. I know that there are a lot of games that go on when trading the Naz but I know that I am competing against the MM's and I think the rules are relatively balanced for the active trader. On the other hand, the Specialist system as you say is too cloudy since the guys are supposed to keep things fair and orderly not drill you in the ass every chance they get. At least Market Makers don't try to pass off some bullshit about doing the investing public some great service, they are there to take your money away from you and that's it!
Nitro, let's get a couple of things straight here; First of all enough with the "why don't you become a Specialist" shit. We both know you don't just go down to the exchange and say "ah yeah, I'd like to be one of them there specialists, heard ya can make lots o' money doin it" . I have no desire to be a specialist. "Black Swan" events, I would say pretty much all of us live these on a daily basis. Most of us probably have exposure at least once a year that could be fatal. If you are making an aggressive short term directional trade, and have got some size on, and two planes happen to run in to a couple of very large buildings in the world's financial capital, I'd say your living a "Black Swan" event. This doesn't apply solely to all those good samaritan specialists out there. Anyone who is trying to make a living in the markets is exposed to this. Your absolutely right about bitching about it! I have already wasted too much of my time on this subject. Truth is if you can handle the rules of the game then you play. Casinos are full of people giving money away by the boat load taking ridiculous bets and playing games that are slanted greatly against them. Who am I to tell these people that they are fools for doing so, hell some people even win some times. I just exercise my right not to participate, as I do for the most part when it comes to trading NYSE and AMEX. Thing is, the reason I posted on this thread was to ask why the hell if I want to expose myself on both sides of the market by putting my balls in the hands of the specialist, I am prohibited. Seems to me like I am doing the specialist a favor providing him with order flow, liquidity and opportunity to make money. Why is this seen as competition and a bad thing that needs to be prohibited? I have not yet gotten a straight answer on that! MACD
NBBO: Can you provide a link to where you see the rule about not being able to make markets in AMEX equities? AFAIK, there are no such restrictions. Options, of course, are a different story. The originator of the thread was talking about GLOBEX and IB's supposed reasoning for the change of status colors. Also AFAIK, IB could care less about any of its retail customers making markets anywhere. If I were as big as they are, I would feel the same. "Bring it on"